OMJ2ITCONSULTING LTD

Executive Summary

OMJ2ITCONSULTING LTD has experienced a sharp decline in financial health, moving from a stable position with positive net assets to a state of negative equity and liquidity stress. Immediate actions focusing on cash flow management, cost control, and potential capital injection are essential to stabilize the company’s finances and avoid insolvency risks. Proactive monitoring and strategic adjustments will be key to restoring financial wellness.

OMJ2ITCONSULTING LTD - Analysis Report

Company Number: 13130217

Analysis Date: 2025-07-20 12:03 UTC

Financial Health Assessment of OMJ2ITCONSULTING LTD

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1. Financial Health Score: D

Explanation:
The company’s financial position has deteriorated significantly in the latest financial year, moving from a strong net asset position of £19,453 in 2024 to a net liability of £5,068 in 2025. This sudden shift indicates symptoms of financial distress requiring urgent attention. While the company was profitable and stable previously, the current financial "vital signs" reveal a worrying cash flow and balance sheet health.

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2. Key Vital Signs

Metric	2025 Value	Interpretation
Current Assets	£12,113	Liquid assets available to cover short-term obligations, reduced sharply from £35,494 in 2024.
Current Liabilities	£16,221	Short-term debts increased slightly, now exceeding current assets, indicating liquidity pressure.
Net Current Assets	-£4,108	Negative working capital, a "symptom" of cash flow stress, meaning liabilities due soon exceed assets.
Net Assets	-£5,068	Total liabilities exceed assets, indicating the company is technically insolvent on paper.
Shareholders’ Funds	-£5,068	Negative equity reflects accumulated losses or increased liabilities eroding shareholder value.
Share Capital	£1.00	Minimal capital base, typical for micro-entity but offers little buffer against financial shocks.

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3. Diagnosis: What the Financial Data Reveals

• Healthy Past vs. Present Crisis: For the first three years (2021–2024), the company showed healthy net assets and positive working capital, indicating operational stability and good cash flow management. However, the 2025 accounts reveal a sudden and significant decline, with net current liabilities surpassing current assets and negative net assets.

• Liquidity Concerns: The negative net current assets are a classic "symptom" of liquidity strain – the company does not have enough short-term assets (like cash or receivables) to meet its immediate debts. This could indicate delayed payments from clients, increased short-term borrowing, or rising operational costs.

• Eroded Equity: The shift from £19,453 net assets to a negative £5,068 shows that losses or liabilities have overwhelmed the company’s financial structure. Negative equity often signals that a company is relying on creditor funding rather than equity, which is unsustainable long-term.

• Micro-entity Status: As a micro company, OMJ2ITCONSULTING LTD benefits from simplified reporting but must be cautious, as minimal capital and a single director (who also is the main shareholder) mean limited resources to absorb financial shocks.

• Single Director Control: Mr Christopher David Johnson holds full ownership and control, which provides streamlined decision-making but also concentrates financial risk.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Immediate Cash Flow Management:
  Conduct a detailed cash flow forecast to identify timing mismatches between inflows and outflows. Explore options to accelerate receivables or negotiate extended payment terms with suppliers to alleviate short-term cash shortages.

• Cost Control and Expense Review:
  Review all operating costs to identify non-essential expenses that can be reduced or deferred. Tightening the cost structure will relieve pressure on liquidity.

• Capital Injection or Debt Restructuring:
  Consider injecting additional equity capital or restructuring existing liabilities with creditors to improve the balance sheet and restore positive net assets. This could involve informal arrangements or formal negotiations.

• Financial Monitoring:
  Implement regular financial health checks (monthly or quarterly) to detect early warning signs of financial distress. Use simple dashboards tracking current assets, liabilities, and cash flow.

• Explore Growth or Diversification:
  Given the IT consultancy nature, explore new markets, services, or clients to increase revenue streams and reduce dependency on a narrow client base.

• Professional Advice:
  Seek advice from financial advisors or insolvency practitioners if liquidity issues persist or worsen, to explore options such as turnaround strategies or formal insolvency procedures if necessary.

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Medical Analogy Summary

OMJ2ITCONSULTING LTD’s financial "vital signs" have gone from "healthy pulse" and "stable blood pressure" to clear "symptoms of distress"—negative working capital and eroded equity. Without prompt intervention to restore liquidity and strengthen the financial "immune system," the company risks "organ failure" in the form of insolvency. Early treatment through cash flow management and capital support is critical to recovery.

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